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Restructuring Liabilities
12 Months Ended
Dec. 31, 2016
Restructuring And Related Activities Abstract  
Restructuring Liabilities

13.

RESTRUCTURING LIABILITIES

The following table summarizes the changes in the restructuring liabilities for the last three fiscal years (in thousands):

 

 

 

Severance

 

 

Facility

 

 

 

 

 

 

 

and Related

 

 

Closing

 

 

 

 

 

 

 

Costs

 

 

Costs

 

 

Total

 

Balance at December 28, 2013

 

$

69,072

 

 

$

2,146

 

 

$

71,218

 

Current period charges

 

 

106

 

 

 

 

 

 

106

 

Change in estimate

 

 

(584

)

 

 

(1,152

)

 

 

(1,736

)

Payments and usage—net of accretion

 

 

(12,144

)

 

 

(563

)

 

 

(12,707

)

Balance at December 27, 2014

 

 

56,450

 

 

 

431

 

 

 

56,881

 

Current period charges

 

 

175,749

 

 

 

36

 

 

 

175,785

 

Change in estimate

 

 

(4,196

)

 

 

 

 

 

(4,196

)

Payments and usage—net of accretion

 

 

(109,369

)

 

 

(257

)

 

 

(109,626

)

Balance at January 2, 2016

 

 

118,634

 

 

 

210

 

 

 

118,844

 

Current period charges

 

 

71,514

 

 

 

2,563

 

 

 

74,077

 

Change in estimate

 

 

(21,004

)

 

 

267

 

 

 

(20,737

)

Payments and usage—net of accretion

 

 

(146,548

)

 

 

(2,175

)

 

 

(148,723

)

Balance at December 31, 2016

 

$

22,596

 

 

$

865

 

 

$

23,461

 

 

The Company periodically closes or consolidates distribution facilities and implements initiatives in its ongoing efforts to reduce costs and improve operating effectiveness. In connection with these activities, the Company incurs various costs including multiemployer pension withdrawal liabilities and settlements, severance and other employee separation costs that are included in the above table.

2016 Activities

During fiscal year 2016, the Company incurred a net charge of $50 million for Severance and Related Costs associated with its efforts to streamline its field operations model, streamline its corporate back office organization, centralize replenishment activities and complete the closure of the Baltimore, Maryland distribution facility.  The Company also incurred $3 million in Facility Closing Costs related to a lease termination settlement.

The streamlining of the field operations model, which was announced in fiscal 2015, resulted in a restructuring charge of $20 million, consisting primarily of Severance and Related Costs.

The Baltimore, Maryland distribution facility was closed during 2016, and the Company incurred $15 million of costs associated with the closure activities.  In addition, the Company settled its fiscal 2015 estimated pension withdrawal liabilities associated with the Baltimore facility, and realized a benefit of $4 million.

During the Company’s fourth quarter 2016, the Company announced its plan to streamline its corporate back office organization, and centralize certain replenishment activities, and incurred restructuring charges of $13 million and $7 million, respectively, consisting primarily of Severance and Related Costs.

At December 31, 2016, Severance and Related Costs primarily consisted of $3 million, $11 million and $7 million related to the Company’s field reorganization, corporate reorganization, and replenishment centralization initiatives, respectively.      

2015 Activities

During fiscal year 2015, the Company incurred a net charge of $172 million primarily for Severance and Related Costs related to the field reorganization, closure of the Baltimore, Maryland facility and settlement of the Central States Teamsters Union Pension Plan (“Central States”) described below.

During 2015, the Company announced its plan to streamline the field operations model discussed above, and incurred a restructuring charge of $30 million, consisting primarily of Severance and Related Costs.

The Baltimore, Maryland distribution facility closure noted above was announced in the fiscal second quarter of 2015. In anticipation of the closure, the Company accrued a restructuring charge of $55 million, including $50 million of estimated multiemployer pension withdrawal liabilities, which was settled in fiscal 2016.

In December 2015, the Company reached a settlement with Central States as discussed in Note 17, Retirement Plans. The settlement relieved the Company’s participation in the “legacy” pool and settled the related legacy multiemployer pension withdrawal liability, and commenced the Company as a new employer in the “hybrid” pool of the Central States Teamsters Southeast and Southwest Area Pension Fund (“Central States Plan”). The payment also included the settlement of certain other Central States multiemployer pension withdrawal liabilities relating to facilities closed prior to 2015, and the related Eagan, Minnesota labor dispute. The settlement resulted in a restructuring charge of $88 million.